Couple’s €44,000 mortgage exit fee upheld

A RULING that a financial institution was entitled to charge a €44,000 exit fee to a couple seeking to switch to a variable rate mortgage doesn’t bode well for householders considering a similar move.

Yesterday the financial ombudsman Joe Meade ruled the young couple with a five-year fixed rate mortgage on a €400,000 home had to pay the exit fee.

Mr Meade said having reviewed the documentation, he found the bank “had acted correctly” and that the fee was in line with terms and conditions of the loan.

“As long as that breakage fee is calculated in line with the current formula, then the bank will have acted correctly,” Mr Meade said.

Fine Gael’s Enterprise spokesperson Leo Varadkar said people who were on fixed rate mortgages were “really suffering” and called for a cap on what can be charged.

Mr Meade said his office is currently investigating 150 complaints, covering all mortgage lenders, and each case would be individually investigated.

With interest rates plummeting, many customers are seeking to change from a fixed to a variable rate mortgage, but they face breakage fees of between €10,000 and €45,000.